You should read the following discussion and analysis of our financial condition
and results of operations together with our condensed financial statements and
accompanying notes included in this Quarterly Report on Form 10-Q and our
audited financial statements and accompanying notes included in our Annual
Report on Form 10-K for the year ended
Forward-looking Statements
This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the federal securities laws, and such statements may involve substantial risks and uncertainties. All statements, other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, but not limited to, statements concerning: expectations regarding our future expenses, potential liabilities relating to litigation and financing needs; and other information referred to under this section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements by terms such as "may," "might," "will," "objective," "intend," "should," "could," "can," "would," "expect," "believe," "design," "estimate," "predict," "potential," "plan," "anticipate," "target," "forecast" or the negative of these terms and similar expressions intended to identify forward-looking statements. Forward-looking statements are not historical facts and reflect our current views with respect to future events. Forward-looking statements are also based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
There are a number of risks, uncertainties and other important factors that
could cause our actual results to differ materially from the forward-looking
statements contained in this Quarterly Report on Form 10-
Company Overview
We are a pharmaceutical company formerly focused on the development of tesetaxel, an investigational, orally administered chemotherapy agent that belongs to a class of drugs known as taxanes, which are widely used in the treatment of cancer. We recently announced the discontinuation of development of tesetaxel and our intent to wind down tesetaxel-related operations. We are working with clinical sites to transition patients in ongoing tesetaxel studies to appropriate alternative therapies or facilitate continuation of treatment with tesetaxel under compassionate use programs where appropriate.
Results of Operations
The following table summarizes our results of operations for each of the periods below (in thousands): Three Months EndedMarch 31, 2021 2020
Research and development expense
$ 50 $ 658 14 --------------------------------------------------------------------------------
Research and Development Expense
All of our research and development expense incurred until recently had been incurred in connection with the development of tesetaxel and recently includes the wind-down of tesetaxel-related operations. Research and development expense includes non-personnel-related and personnel-related expense. Non-personnel-related expense primarily consists of expense incurred prior to the discontinuation of development of tesetaxel and includes expense related to: (i) manufacturing development and scale-up, including manufacturing registration and validation batches of tesetaxel; (ii) clinical study site payments; (iii) acquiring clinical study materials and the clinical study supply chain; (iv) pharmacokinetic studies; and (v) clinical and quality systems. Personnel-related expense includes expense related to salaries, benefits, restructuring expense and equity-based compensation for personnel engaged in research and development functions. We expect our research and development expense to decrease significantly due to the discontinuation of development of tesetaxel and wind-down of tesetaxel-related operations.
The following table summarizes our research and development expense for each of the periods below (in thousands):
Three Months Ended March 31, 2021 2020 Non-personnel expense: Clinical development$ 15,654 $ 16,535 Other 412 485 Total non-personnel expense 16,066 17,020 Personnel expense: Salaries, bonuses and benefits 7,568 8,625 Restructuring expense 5,465 - Equity-based compensation expense 1,829 2,302 Total personnel expense 14,862 10,927
Total research and development expense
Research and development expense was
General and Administrative Expense
General and administrative expense includes non-personnel and personnel-related expense. Nonpersonnel-related expense includes expense related to: (i) professional fees for legal, patent, consulting, accounting and audit services; (ii) facilities and information technology; and (iii) insurance. Personnelrelated expense includes expense related to salaries, benefits, restructuring expense and equity-based compensation for personnel engaged in finance and administrative functions. We expect our general and administrative expense to decrease significantly due to the discontinuation of development of tesetaxel and winddown of tesetaxel-related operations.
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The following table summarizes our general and administrative expense for each of the periods below (in thousands):
Three Months Ended March 31, 2021 2020 Non-personnel expense$ 1,715 $ 1,442 Personnel expense: Salaries, bonuses and benefits 888 1,148 Equity-based compensation expense 270 284 Restructuring expense 17 - Total personnel expense 1,175 1,432
Total general and administrative expense
General and administrative expense of
Other Income, Net
Other income, net consists primarily of interest income generated from cash held in savings accounts. Other income, net also includes losses on disposal of property and equipment and gains and losses on foreign currency transactions.
Other income, net was
Liquidity and Capital Resources
As of
Net cash used in operating activities was
We entered into an Open Market Sale Agreement during the three months ended
We expect to finance our future cash needs with cash on hand. If necessary or appropriate, we may raise additional capital through equity offerings, debt financings, collaborations, strategic partnerships or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic partnerships or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property on terms that may not be favorable to us.
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Contractual Obligations and Commitments
See Note 5 to the condensed financial statements included in Item 1 of this Quarterly Report on Form 10-Q, under the subheading "Lease Commitments," for information regarding our material lease agreements and Note 9 for information regarding our license agreement with Daiichi Sankyo Company, Limited for rights to tesetaxel.
Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, any
off-balance sheet arrangements as defined under the rules of the
Jumpstart Our Business Startups Act
We are an emerging growth company, as defined in the Jumpstart Our Business
Startups Act of 2012 (the "JOBS Act"). Under this act, an emerging growth
company can delay the adoption of new or revised accounting standards issued
subsequent to the enactment of the JOBS Act until those standards would
otherwise apply to private companies. We have irrevocably elected not to avail
ourselves of this exemption from new or revised accounting standards and,
therefore, will be subject to the same new or revised accounting standards as
other public companies that are not emerging growth companies. However, we
intend to rely on other exemptions provided by the JOBS Act, including without
limitation, an exemption from the auditor attestation requirements of
Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended. We will remain an
emerging growth company until
Critical Accounting Policies and Significant Judgments and Estimates
We believe the estimates, assumptions and judgments involved in the accounting
policies described in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Item 7 of our Annual Report on Form 10-K
for the year ended
Recent Accounting Pronouncements
See Note 2 to our condensed financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
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